Well who woulda thunk it. Freedumb doing a book review. That’s like a vegan eating meat. Well, okay, not really, but I haven’t picked up a book book since college.
When I was asked by JLP if I was interested in covering a chapter for his October Project, I was a little hesitant because I didn’t know if I could really finish the book and write a review. Well, I was right. I didn’t finish it, but I got really close, and I plan to continue reading the rest of it shortly. It’s just been a crazy month, but hey I finished my chapter…and quite a few more.
On to the review.
Let me start by saying that this book really surprised me. It wasn’t too technical, but it had a lot of details and examples. On top of that, it had a unique feel to it…almost like it was written by a fellow blogger. It just had some flare to it I guess.
My chapter from The Bogleheads: Guide to Investing was chapter 21, titled “Protect Your Assets by Being Well-Insured.” I don’t have a family, so personally, I wasn’t too intrigued when I got assigned this chapter, BUT I always wondered what the heck life insurance is, so it was a good read.
It starts off with “Common Insurance Mistakes,” a great section. The three mistakes discussed:
- Insuring the unimportant while ignoring the critical
- Insuring based on the odds of misforture
- Insuring against specific, narrow circumstances
When shopping for insurance, even for a car, you loose track of the priorities. So point 1 was a little bit of an eye opener. What exactly are you getting insurance for? The rental coverage? Of course not. We buy extended warranties on our TV, but don’t have an umbrella policy.
This chapter also touches on life insurance–the really confusing world of life insurance. If you’re like me, and never understood a single term used in life insurance, this is the section to check out. The advice is straightforward and honest. I especially like this quote:
If you need life insurance, buy term insurance. Term insurance is basic pay-as-you-go, no-frills insurance. It’s the cheapest way to go and serves the purpose.
Or this one:
It’s common for life insurance salespeople to descend like vultures on young people right out of college. The sales pitch to the new grad goes like this: ‘Buy your life insurance while you’re young and in good health, and the rates are low. When you get older or need it, you might be disqualified due to poor health or unable to afford it.’
“Descend like vultures.” Interesting…You think the author is not a big fan of life insurance sales people? But I appreciate the honesty. I like it.
The chapter then goes on to discuss Long-term disability coverage by bringing up a point I never really considered. “What’s your most valuable financial asset?”
If you’re like me, you’re thinking maybe my savings? Or how about my home? WRONG. It’s your future earning power! Pretty cool huh?
The chapter goes on to discuss: Protecting your property, Long-term care, and of course, locating good insurance companies and agents.
It even ends by offering some tips to reduce the chance you’ll ever have to face them…like not smoking, excercising, wearing seatbelts, getting rest, etc. Wow! Who would’ve though a book titled “Guide to investing” would have advice on wearing seatbelts.
The bottomline: This chapter not only covers “insurance,” but the decisions process you should consider when looking into insurance. It’s written in a fashion that makes it almost seem like you’re right there with you own personal Boglehead.
Make sure you pick one up! The Bogleheads’ Guide to Investing
This book gets FOUR PAWS from Brownie. Until the next review…uhhh, don’t hold your breath. 
[...] We’re winding it down, folks. After today, there are only two days left in the Bogleheads’ October Project. Today’s Chapter 21 - Protect Your Assets by Being Well Insured review is up at Financial Freedumb. I thank FinancialFreedumb for participating in the Bogleheads’ October Project, a month-long, chapter-by-chapter review of the The Bogleheads’ Guide to Investing by 22 different bloggers. Bookmark to: [link] [...]
Personally, I have always had life insurance, even before I had a family. I wouldnt want my extended family to have the burden of paying for my burial.
My husband had life insurance offered through his work and he chose $50k. He paid one premium and died within 2 weeks of the policy. Not exactly the best scenario, but I was grateful that he had that policy because I would have gone into further debt if he hadnt signed those papers. By the way, I was 8 months pregnant when I passed.
As for personal property insurance, I am going to get some in 2007. I’m only renting but my personal household assets exceed $25,000. I realize that it’s only “stuff,” but I would need the insurance to get me and my son back on our feet. Life WILL go on.
Excuse, me, I meant to say “when he passed,” not when ‘I’ passed.
Maria, I’m sorry.
It’s sad and inspiring at the same time to hear what you went through. The reasons for sad are obvious, but inspiring because no matter what you demonstrated that people have the will to succeed.
I may have lucked out by having a friend in the insurance industry, but he actually advised me not to buy insurance. It seems to make the most sense in Maria’s case, when there’s a baby on the way or someone has to be supported when you are gone. And I think the book is right about term insurance. I plan to wait until I’m ready to be a dad and then get enough insurance to get my child(ren) through college.
Did this chapter mention any particular vendors for disability insurance? Because while I know that I SHOULD have it, I haven’t been able to find a policy that I could afford.
Thanks Freedumb, I’m hoping that by sharing my Life Insurance story enough, that it will inspire enough people, especially money savy people like PF bloggers to at least consider life insurance or even burial. It’s the one item that seems to be neglected. Afterall, the person who purchased the policy wont be there to enjoy it.
[...] Bogleheads Review: Chapter 21 - Insuring Your Assets (Hilarious) @ Financial Freedumb [...]
yeah, i’m currently considering disability options. what if i were to get carpel tunnel syndrome - i couldn’t work and i couldn’t blog!!!